Falling spend on funerals hits bottom line at listed firm

Funeral firm Dignity has seen a hit to its profits after an increasing number of its clients started to choose more simple funeral plans in light of the lockdown restrictions.

For the 13 weeks to 27 March, profits fell 11% to £19.4m from £21.7m in 2019. Revenues rose slightly to £83.1m.

Dignity performed 20,000 funerals in the first 13 weeks of the year (Q1 2019: 19,200), representing a market share of 12.2% (Q1 2019: 12.0 per cent).

As a result of the coronavirus crisis, Dignity decided to temporarily withdraw the provision of its limousines in the interests of the welfare of ritsstaff and clients. Other choices such as church services also stopped being possible during this time. This has meant that average income from full service funerals has reduced to approximately £3,150. In addition, the proportion of clients choosing a simple funeral compared to a full service funeral has increased dramatically to approximately 60% compared to the 20% seen in the first quarter.

Clive Whiley, executive chairman of Dignity, said: “COVID-19 is presenting a unique set of challenges for the UK as a whole and for Dignity. I am proud to be part of a business that has such an important role to play during this crisis. I am particularly thankful to all our staff who have adapted quickly in these times of uncertainty to help our clients remember their loved ones in as personal a way as possible with the restrictions in place. They, together with all those working in the funeral industry, are an easily forgotten subset of key workers who all deserve our thanks.

“We continue to progress the strategic review of the business, initiated upon my appointment in September 2019, which is designed to position the Group for all eventualities. However, with the pausing of discretionary spend wherever possible, combined with healthy cash balances that are freely available for the Group’s use and the means to improve headroom against our covenants, liquidity remains robust for the time being.

“Finally we have chosen not to furlough any employees and do not intend to approach Her Majesty’s Government for direct financial support, beyond business rates relief which we anticipate reinvesting in protecting our staff, where the various government schemes designed to protect jobs and people’s livelihoods are intended for small businesses and sectors that are under threat more directly than Dignity. ”

Dignity says the search for its new chief executive is ongoing. Mike McCollum left last month after over 20 years with the firm.

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